Google, Schmidt, and the Gray Lady Resuscitator™
A cesspool of drivel
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Google is preparing a post-print-age online news service that will feed you the "high-quality news" you want - even when you don't realize you want it.
At least, that's the word from Sharon Waxman, a former correspondent with the The New York Times and The Washington Post now writing for The Wrap, a Hollywood news blog. According to Waxman, Google CEO Eric Schmidt actually spoke to her late last week while mingling with DreamWorks’ Jeffrey Katzenberg and Universal’s Ron Meyer at Arianna Huffington’s Brentwood mansion.
Apparently, Schmidt told her that in roughly six months Google will unveil a "system that will bring high-quality news content to users without them actively looking for it." Waxman calls this the "latest iteration of advanced search." As top-secret Google algorithms scan your "search words, user choices, purchases, a whole host of cues," the mystery service will allegedly determine what sort of top-class news stories suit your particular brain.
With the service providing "premium content," Waxman says, Google will serve up "premium ads." And these ads will make the company more money. Google has no intention of sharing this extra dough with its high-quality news partners - who will include, yes, The New York Times and The Washington Post - but from Waxman's point of view, the papers will see extra dough from other sources.
"By targeting the stories that readers will want to read, [The Times] will get more hits out of the stories it has, which will drive its traffic and ultimately support higher advertising rates beside the stories," she writes.
The Google PR machine hasn't publicly commented on Waxman's claims. But VentureBeat says that "a source close to Google has raised serious questions about the veracity of Waxman’s claims about Schmidt’s comments." No doubt VentureBeat spoke with a Google PR rep off-the-record.
Waxman's sketchy description of Schmidt's alleged news service doesn't make much sense - even if you could trust a Googler waving the word "quality". But Waxman sprinkles her story with a few details - The Times and The Post will be the first to get the "high-quality" news treatment, she says - and it echoes ill-advised comments Schmidt recently made to the Newspaper Association of America.
During his NAA speech, Schmidt burbled about something he called the "entertain me" product. "Search...becomes fundamentally more personal. It's all about what I want, because I'm the one asking the search query," he said. "Why doesn't the newspaper know what I read yesterday?...The new model of consuming news, since it's personal, whether it's search - or other-based - will be knowing that you already read this. It will show you the delta. It will understand a little more about what you care about."
Yeah, yeah. Sure, sure. But how does that give Google the power to serve so-called premium ads against content that's already available on other sites? And even if it did, how could any of this possibly benefit the papers themselves? At least in Waxman's world, Schmidt fails to realize that The Times' problem isn't traffic. It has plenty of that. The problem is how to turn the traffic into profit.
It's unclear whether Waxman is to blame for the muddled "high-quality news" pitch - or Schmidt himself. But whatever Waxman claims - and whatever Schmidt and company have said in the past - Google is no antidote to the slow death of the world's newspapers.
This latest episode reminds us of the rambling, incoherent, self-righteous missive that Google senior VP Jonathan "Perfect Ad" Rosenberg posted to the official company blog in honor of, um, President's Day.
"Systems that facilitate high-quality content creation and editing are crucial for the Internet's continued growth, because without them we will all sink in a cesspool of drivel," Rosenberg wrote as he bemoaned the state of the world's newspapers. "We need to make it easier for the experts, journalists, and editors that we actually trust to publish their work under an authorship model that is authenticated and extensible, and then to monetize in a meaningful way.
"We need to make it easier for a user who sees one piece by an expert he likes to search through that expert's entire body of work. Then our users will be able to benefit from the best of both worlds: thoughtful and spontaneous, long form and short, of the ages and in the moment.
"We won't (and shouldn't) try to stop the faceless scribes of drivel, but we can move them to the back row of the arena."
Never mind that Rosenberg's 4,400-word post is mired in its own cesspool of drivel. What Rosenberg demonstrated oh so well is that although Google likes to hear itself talk about saving our newspapers - and the rest of the planet - it never gets around to actually saying anything.
Schmidt and Rosenberg overplay Google's ability to automatically serve you the stuff you want. And even if the company could achieve such magic, that in no way solves the money problem. They fail to realize that so-called high-quality news is far more expensive than drivel. Reporting a proper story takes time. Churning out drivel takes considerably less.
Some paint Google as a software middleman that's getting between newspapers and their readers. Others claim the opposite is true: that Google does nothing but provide newspapers with new readers.
But, again, traffic is a red herring. It's the money.
To a company like Google - with its very own search-ad money machine - traffic and dollars are synonymous. If newspapers get the traffic, Google seems to think, they can support themselves. But unlike Google, newspapers must pay for their "high-quality" content. The New York Times doesn't need traffic help. It needs money help.
And that's one thing Google can't provide. Even Waxman got that right. ®
COMMENTS
Faster Horses...
The future of media will not be anything that looks like the current structures...
A lesson worth remembering is that at the turn of the 20th century, people had a transportation problem...and the solution turned out not to be a "faster horse"...but a Ford.
And one should note that the Ford didn't arise out of the "horse industry's" R&D efforts, nor the "Horse Industry Revitalization Act" nor the horse industry's attempts to experiment with new Business Models.
I think the future of the media business will look as different as Ford and Toyota's operations look from horse traders and blacksmiths.
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What's historically given value to editorial content is the relative scarcity of distribution versus readers (not the Kindle kind). Newspapers have historically enjoyed natural localized economic monopolies that allowed each of them to exercise monopoly control over the amount of content (and advertising) they allowed into their local marketplace.
Monopoly constraint of distribution and supply will always lead to prices (and profits) significantly above open market rates. Newspapers then built costly organizational structures commensurate with that stream of monopoly profits (think AT&T in the 1970's).
Unfortunately the Internet came along and changed all the rules!
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The dynamics of content replication and distribution on the Internet destroys this artificial constraint of distribution and re-aligns advertising (and subscription) prices back down to competitive open market rates. The often heard complaint of Internet ad rates being "too low" is inverted...the real issue is that traditional ad rates have been artificially boosted for enough decades for participants to assume this represents the long-term norm.
An individual reader now has access to essentially an infinite amount of content on any given topic or story. All those silos of isolated editorial content have been dumped into the giant Internet bucket. Once there, any given piece of content can be infinitely replicated and re-distributed to thousands of sites at zero marginal costs. This breaks the back of old media's monopoly control of distribution and supply.
To paraphrase Nietzsche, "God is dead. God remains dead. And we have killed him with the Internet..."
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The core problem for the newspapers is that in a world of infinite supply, the ability to monetize the value in any piece of editorial content will be driven to zero...infinite supply pushes price levels to zero!
What this implies is that no one can marshal enough market power to monetize the value of content in the face of such an infinite supply and such massively fragmented distribution. Pay-walls, lawsuits and ill conceived legislation won't allow the monopoly conditions to be re-constructed because only ONE VERSION each story has to leak out to start the cycle all over again.
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Another way to think about this is that once data becomes publicly visible on the Internet, its monetizable value rapidly dissipates to zero.
This is at the core of why Google can extract $25B a year from the economy without creating ANY content...what they create is meta-data about content (which CAN be monetized)...and all that meta-data remains non-visible. Only the results of decisions based on that meta-data by their search and advertising platforms is made publicly visible.
The lesson is that Google DOES NOT monetize other people's content...it monetizes its OWN meta-data. This is certainly one path to making the news profitable...not search per se...but various other approaches to the monetization of meta-data that's within the reach of publishers.
So the exquisite irony is this:
In the future, the only content that will have monetizable value is content that no one is ever allowed to read! (i.e. the meta-data)
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There are certainly ways to make online news profitable...and many of us are working to develop such approaches...but I can assure you they don't involve inventing a "faster horse"...
Dale Harrison
dale.harrison@inforda.com
Schmidt wants to dumb-down the public?
Let me get this straignt -- in Eric Schmidt's brave new world of goonews, readers will only see news that their past reading history suggests that they may want to read? In other words, if America suddenly institutionalizes torture in its war against terror, no one will read about it on Google -- simply because the issue has not been on the American political agenda prior to that war?
There are certainly problems with a lack of objectivity in mainstream media, due to various economic, political, and ideological pressures, as well as secrecy in high places. But putting readers in a box and feeding them only what they prefer to read is a huge step backwards. This might be okay for mindless entertainment media, but not for news media. Taken to the extreme, it would make everyone oblivious to global current events, and unqualified to vote in a democratic society.
We know that Schmidt pushes this because the ads alongside the news will be highly targeted and make Google richer than it already is. But for Schmidt to pretend that it's also a step forward for society is absurd and potentially dangerous.
Who would this story have got through to?
Sharon Waxman blah, blah, blah Eric Schmidt blah blah mingling with Jeffrey Katzenberg blah blah and Ron Meyer blah blah at Arianna Huffington’s blah blah.
Is this name drop paragraph included as an example of the drivel that the Googly bloke vp thingy is referring to?
Or are you praticing for a new job with Hell! oh!!
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